The way Adam Levin sees it, High Times is a business that has yet to be properly baked.
Two months after leading an investor group that bought Trans-High, owner of the iconic marijuana advocacy magazine, Levin says he's remaking the company to capitalize on the wave of decriminalization laws and increasing acceptance of cannabis consumption.
"High Times really hasn't innovated in the right ways or moved forward with the times," said Levin, an investor in a range of digital properties who runs Oreva Capital, a venture capital firm based in Los Angeles. "But it's always been relevant. If there's is a national brand that consumers think of when they think of marijuana and cannabis, it's High Times."
Levins is the chairman of a new company, High Times Holding, that also acquired Trans-High's events business and a collection of websites in a transaction valued at $70 million.
Joining Levin are about 20 other investors including Damian "Jr. Gong" Marley, son of the great Jamaican reggae singer Bob Marley and co-founder of Stony Hill (STNY) , a company focused on the cannabis industry. Ean Seeb, a founding partner of cannabis-focused Denver Relief Consulting, is another investor in the newly-formed company.
The transaction comes after Colorado and Washington state legalized the sale of marijuana in 2013 and other states, including California, have taken a variety of steps to decriminalize possession. Legal marijuana sales in North America reached $6.7 billion last year and are expected to triple by 2021, according to Arcview Market Research, a cannabis research firm.
Of course, it wasn't always that way. Back in the 1970s, marijuana was anything but legal, and decriminalization was but a dream. Sellers of even small quantities could spend years in prison; laws about possession differed from state to state, or courthouse to courthouse.
High Times was born when an all-around gadfly and marijuana advocate, Tom Forcade, decided to start the magazine from a Greenwich Village basement in New York in 1974, partly as a spoof on Playboy. But the idea quickly blossomed into a full-fledged business, attracting a variety of writers and iconoclasts.
At its prime, High Times counted as many as 500,000 subscribers, often featuring cutting-edge journalism in addition to a centerfold of a marijuana plant, sort of like Playboy. The magazine's circulation stands at 236,000 monthly print subscribers. The publication is also sold at cannabis dispensaries and lifestyle shops around the country.
Forcade's family and others connected with the early years of the magazine continued to own High Times, and they retain small equity stakes in the new company.
The largest part of High Times Holding is an events business that Levin says accounts for 70% to 75% of revenue. High Times' signature event, the Cannabis Cup, will be held at 11 venues around the world this year. The gatherings -- the next is in Santa Rosa, Calif., this weekend -- feature sales, seminars ("Dosing Your Homemade Edibles and Topicals") and marijuana events (a timed cook-off).
But whereas a competitor site, WeedMaps, generates about $60 in revenue per user per year, Levin says High Times gets just $17 annually per user.
To increase sales, he said the company will look to expand advertising and subscriptions connected to its print publication and the websites HighTimes.com and Cannabis.com, while expanding the High Times brand through licensing and additional events.
Given the number of states that have eased laws, Levin envisions Cannabis Cup events becoming more common. Indeed, public acceptance of marijuana has never been higher. A 2016 study by the Pew Research Center found that 57% of U.S. adults say the use of marijuana should be made legal.
"At the end of the day, media companies are just buying communities, and High Times is the leader in this community," Levin said. "All of the parts of the business can and will work together more cohesively because this is a brand that just hasn't been monetized effectively."
One impediment for High Times and the movement it has long championed, though, is U.S. Attorney General Jeff Sessions, who is not a fan of legalized marijuana and is expected to take a harder line on sentences for using and distributing the drug, which remains illegal under U.S. law.
"We're been a law-abiding company, and we want to be a preferred vendor to do events that bring together legal growers and sellers," Levin said. "We want to create a great experience for fans and patients to consume and transact in cannabis in a safe environment. We're championing all of these things."